8th of April 2022 - AUD continues to fall as volatility spikes


Market Wrap

Equities finished the day green although the Russell was the laggard in the red while growth outperformed value but the S&P was the outperformer on the closing bell sparked by an afternoon rally.

There was no specific catalyst for the afternoon rally although perhaps the recent selling pressure had been over done with key risks out the way with the FOMC minutes now behind us, although market attention will turn to US CPI next week.

Initial Jobless Claims saw a strong improvement although it garnered little market reaction. The Treasury curve continued to steepen with steepeners piling on in wake of remarks from Bullard who also gave the nod to a May balance sheet reduction,

noted by a couple of definitions the Fed is 'behind the curve", while also calling for FFR at 3.5% by H2 22.

Geopolitics remains fluid, Russian Foreign Minister said Ukraine presented a new draft agreement to Russia on Wednesday but they are unacceptable on Crimea and Donbas.

The ECB minutes was deemed as hawkish where a large number of members held the view high inflation and its persistence called for immediate further steps, while some members preferred to set a firm end date for APP net purchases in the Summer, clearing the way for a possible rate rise in Q3.

Oil prices continued their collapse on Thursday to see Brent fall beneath USD 100/bbl for the first time since March 17th, helping ease inflationary/recessionary concerns. In stocks, sectors are mixed with Real Estate, Communication Services, Utilities and

Financials lagging while Health Energy, Consumer Staples saw strong gains - Tech and Consumer Discretionary also closed green after recent underperformance.


FX .


The Dollar was eventually bid on Thursday after being choppy throughout the session as it appeared to take its lead from the yield environment whilst analysts also note the initial dollar pullback was also influenced by two-year Treasury yields, which corrected after hitting their highest since January 2019 on Wednesday, and as short and long-term index resistance came into play. Nonetheless, the Buck firmed but within a contained range, 99.390 and 99.833, on the back of the hawkish FOMC minutes on Wednesday. Thursday was more-or-less deja-vu from Wednesday, as the Greenback posted yet another YTD high, 99.8


33, but failed to test 100.00.


Lastly, the Buck also saw strength on the back of Fed's Bullard (voter) comments who said even a generous reading of monetary policy rules show FFR of around 3.5% needed to fight high inflation.

Note, there was a brief blip of weakness earlier in the session on commentary from Russian Minister Lavrov that Ukraine presented a new draft agreement to Russia on Wednesday that were different to the ones in Istanbul, although the leg lower pared immediately after Lavrov noted proposals on Crimea and Donbas are unacceptable


Antipodeans (AU & NZ) and the CAD were the G10 underperformers, all seeing similar losses against the Buck.

the Aussie continued to reverse from its gains seen in the wake of the hawkish RBA, as AUDIUSD broke beneath 0.7500 to lows of 0.7468, whilst the Kiwi could not hold onto support at 0.6900, to hit a bottom of 0.6882.

EUR was more-or-less flat on Thursday, but the single-currency did derive some impetus from the ECB's minutes which were framed as hawkish. On the minutes, the catalysts were probably that a large number of members held the view that the current

high level of inflation and its persistence called for immediate further steps towards monetary policy normalisation plus it was argued that, for all practical purposes, the three forward guidance conditions for an upward adjustment of key interest rates had either already been met or were very close to being met


Currency ranges over the last 24 hours




Source – Macquarie Bank


Disclaimer: This material is provided by Navigate Global Payments (Navigate) ACN 615 699 888, AFSL 502711. The material contains general commentary only and does not constitute investment or any other advice. Certain types of transactions, like futures, options and high yield securities can be risky, and not suitable for all investors. This information has been prepared without considering your objectives, financial situation or needs. Please seek your own independent legal or financial advice before proceeding with any investment decision. The information is believed to be accurate at the time of compilation and is provided in good faith. Navigate does not warrant the accuracy or completeness of any information contributed by a third party. The information is subject to change without notice and Navigate is under no obligation to update the information. The information contained in this material are opinions of the author at the time of writing and does not constitute an offer, recommendation to act, a solicitation of an offer, or an inducement to subscribe for, purchase or


sell any financial instrument or to enter a legally binding contract. This information, including any assumptions and conclusions is not intended to be a comprehensive statement of relevant practise or law that is often complex and can change. Past performance is not a reliable indicator of future performance. Any forecasts given


in this material are predictive in character.


Jordan Praturlon

Senior Corporate Account Manager


Level 8, 140 Arthur Street, North Sydney, NSW 2060

Direct: +61 (2) 9066 7215 | Office: +61 (2) 9058 2920

Mobile: +61 (0) 425 223 585

Email: jordanp@navigategp.com.au

Web: www.navigategp.com.au

ACN: 615 699 888 | AFSL: 502711




Disclaimer: The information contained in this email may provide general information. It does not have any regard to the financial situation or needs of any recipient(s) and must not be relied upon as financial product advice to any degree. You should consider seeking independent financial advice before making any decision based on this information. The information in this email and any opinions, conclusions or recommendations are reasonably held or made, based on the information available at the time of it being sent but no representation or warranty, either expressed or implied, is made or provided as to the accuracy, reliability or completeness of any statement made in this email. The content of this email is confidential and intended for the recipient(s) specified in the message only. It is strictly forbidden to share any part or all of this message with any third party, without a written consent of the sender. If you received this message by mistake, please reply to this message and follow with its deletion, so that we can ensure only appropriate recipients receive our communications.


Recent Posts

See All

Disclaimer

This material is provided by Navigate Global Payments (Navigate) ACN 615 699 888, AFSL 502711.  The material contains general commentary only and does not constitute investment or any other advice.  Certain types of transactions, like futures, options and high yield securities can be risky, and not suitable for all investors.  This information has been prepared without considering your objectives, financial situation or needs.  Please seek your own independent legal or financial advice before proceeding with any investment decision.  The information is believed to be accurate at the time of compilation and is provided in good faith.  Navigate does not warrant the accuracy or completeness of any information contributed by a third party. The information is subject to change without notice and Navigate is under no obligation to update the information. The information contained in this material are opinions of the author at the time of writing and does not constitute an offer, recommendation to act, a solicitation of an offer, or an inducement to subscribe for, purchase or sell any financial instrument or to enter a legally binding contract.  This information, including any assumptions and conclusions is not intended to be a comprehensive statement of relevant practise or law that is often complex and can change.  Past performance is not a reliable indicator of future performance. Any forecasts given in this material are predictive in character.Navigate Global Payments Pty Ltd nor its related parties or officers accepts no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the information contained or related to this site.